Both nonsupervised and supervised lenders can request the VA recognition of one of their agents. To obtain approval of this request, the agent must have an ongoing relationship with the lender. This means the lender has worked with the agent at least four times over the last year.
The lender may allow an agent to perform any loan-related functions. The VA requires that that the lender accepts full responsibility for the agent, meaning any errors or omissions made by the agent are on the lender. An infrequently used agent may also be authorized but only on a loan-by-loan basis.
Requesting VA Recognition of an Agent
VA recognition for an agent is required when lenders want to use a certain agent for closing loans. The first thing a lender must do is submit the request for recognition to the VA Office of Jurisdiction over the lender. This request must include a corporate resolution, which includes:
- The agent’s name, address, and the geographic area in which the agent will be originating and closing VA loans
- The agent’s function(s) (such as taking the loan application, ordering the credit report and verifications of employment and deposit, holding settlement)
- A statement that the lender takes full responsibility for all acts, errors, or omissions of the agent and its employees
If the agent is approved, the VA will send the lender a statement in writing. After receiving recognition from the VA, the lender may begin utilizing the agent for loan-related services.
Recognition for Many Agents
Some lenders require the services of many agents on an ongoing basis. This would include lenders who have a large clientele. Instead of submitting a corporate resolution for each agent, a lender may submit what is called a “blanket” corporate resolution, which would need to include:
- The agents’ function(s) (such as, taking the loan application, ordering the credit report, and verifications of employment and deposit, holding settlement)
- A statement that the lender takes full responsibility for all acts, errors, or omissions of its agents and agents’ employees
- If agents will enter into interest rate lock-in agreements on the lender’s behalf, a statement that the lender will honor the lock-in
- The identity of the officer(s) of the lender who is (are) delegated authority to request recognition of additional agents under the “blanket” corporate resolution and delete agents
The VA will still require each agent’s name, address, and location that they will be working in. The lender may begin using any of their agents as soon as the VA sends them a written letter of recognition approval.
Each agent approved by the VA will receive a VA ID number. This number will serve as an identifier of the agent for the VA. Every agent must request this number from the VA whether they are under a lender or not.
Closing Loans Automatically
An agent under the supervision of a lender with automatic authority can always close loans automatically. If the lender over an agent is nonsupervised, then all loans made by the agent must be approved by a VA underwriter. This means that even if the agent has automatic authority, they may not close loans automatically if their lender does not have that authority.
An agent with automatic authority may sell loans to a lender, which would be considered automatically guaranteed after purchased. If an agent does not have this authority, then loans are not automatically guaranteed.
Don’t Wait To Start Your Loan
VA home loan applications are available to veterans looking to purchase a home. You can start you VA home loan application by clicking here.